Does the “Tech” in Fintech Still Matter?

Note from the CEO:  I remember a song years back “Video Killed the Radio Star” (The Buggles, I believe) and here we are with “Technology Killed the IT Costs”. Not quite as catchy but raises some nice thoughts. Great article. Not as good as The Buggles song though.

Seems the development costs have gotten so low that all the new technology has taken away the edge that Fintechs have enjoyed. The Cloud and Open Source software have made it easier (and cheaper) for startups to get up and running BUT not without some unanticipated consequences. Super article and very thought provoking.

“Now IT development costs are so low for start-ups I feel that technology is no longer the key edge for FinTechs.

I read an interesting press release recently from an early stage vendor who was just announcing a strategic partnership with a large data vendor. I found it particularly interesting because they touch on the nub of the challenge that many FinTechs are facing. Despite the Tech part of the FinTech name, great Technology is now rarely the differentiator. Why is this? To a very large extent it is because of the Cloud and Open source software.

Until recently, it would have taken many millions of pounds/dollars or Euros just to get an enterprise up and running. Start-ups would have had to buy – “Oracle database licenses, UNIX servers, a Sun Solaris operating system, loads of web servers/cabinets/coolers, load balancers, EMC storage, disk mirrors for redundancy,” and that was just for starters. 

Today, start-ups don’t need any of that. Nowadays one or two people can start their company without the large upfront costs that meant you needed to go to the VC industry. Time spent fundraising can now be diverted to building solutions. Amazon Web Services & Open Source give today’s firms cost-effective scale and speed that previous generations could only dream about……..”